G overnments are bound by numerous international conventions concerning the interplay of the environment and natural resources with investments, political relations, and world trade. At least two distinct sets of factors affect domestic environmental policymaking imposed by international regulations. On the one hand are concerns over the effects of environmental policies on international competitiveness. On the other, international policymaking plays a necessary role both in providing public goods and dealing with transboundary or global pollution, such as the greenhouse gases contributing to climate change. In this chapter, we first explore the interaction of environmental regulations and international trade and then analyze transboundary pollution and climate change.